The chairman of the Revenue Commissioners has been asked by the Democratic Left spokesman on finance, Mr Pat Rabbitte, to clarify the existing powers governing the regulation of Irish registered nonresident (IRNR) companies

Section 58 of the 1995 Finance Act requires all IRNRs to provide information on their name, address, nature of trade and from where they are controlled and managed.

Earlier this week, the Minister for Finance, Mr McCreevy, stated section 58 "has not been as successful as was wished" in deterring IRNRs from carrying out "undesirable activities" and he deplored the message that the country was "some sort of Cayman Islands tax haven".

"The intention was to turn the spotlight on those using company formation for unacceptable purposes and in this way to encourage them to conduct their affairs elsewhere," Mr McCreevy told the Dail.

However, Mr Rabbitte, in proposing to draft an amendment for the 1998 Finance Bill, is requesting the Revenue Commissioners to state, if section 58 was not applied, why this was the case.

"It is very difficult to address these issues in the current Finance Bill unless there is clarity on this point," he states.

A spokeswoman for the Revenue Commissioners said yesterday that the commissioners wrote to all Irish registered companies to identify non-resident ones "and more importantly where they are controlled and managed". "What we are doing is identifying that category of company that is not identified at the stage of registration," she said.

Where a company is controlled and managed determines whether it is non-resident for tax purposes. But if non-residency is determined, the Revenue Commissioners interest in the company ends. Section 58 of the Finance Act 1995 provides for an amendment to the Corporation Tax Act 1976, requiring IRNRs to submit a statement to the Revenue Commissioners on their activities. Among the details to be provided within 30 days of incorporation are "the territory in which the central management and control of the company is normally carried out and such other information as the Revenue Commissioners consider necessary for the purposes of determining the territory in which the company is resident for the purposes of tax".

According to the memo from officials of the Department of Enterprise, Trade and Employment, inadvertently leaked ail this week, the number of IRNRs is "being pursued with Revenue for some time".